As states keep opening up around the country and the economy goes back to “normal”, what will happen to the Real Estate market? Well, it depends.
Will property values decline? I feel it is too early to tell. Properties being appraised right now are being appraised using data from the last 3-6 months, which is not taking into consideration owners being forced to sell because somehow they’ve been impacted by COVID-19. With that in mind, I believe that we will not see the effects of COVID-19 on property values until probably the end of Q3, beginning of Q4.
Will the market crash like it did back in the financial crisis of 2008? Don’t think so. However, I do believe opportunities will arise due to COVID-19. First, those opportunities will come from mortgaged rental properties where the owners were not financially prepared for the situation we are in right now. Why? Due to COVID-19, evictions have been suspended until further notice. This puts pressure on the landlord’s finances in occasions where the landlord has a tenant that has lost their source of income due to the virus. If the tenant can’t pay the rent, the landlord can’t pay the mortgage, and well… we know what happens next.
Then comes the Commercial Properties. Especially office spaces. In short, employers that are still open are realizing that it’s cheaper to have the employee at home than it is to pay for an office space. They would rather incur the expense of setting up the employee with a home office and have an occasional conference room available for in-person meetings, than to keep paying for a monthly space and the expenses that come with those. This is not counting the retailers who won’t be able to open again after everything opens up.
Of course, there’s a lot more that goes into these things to happen, but I’m just giving my “two cent” as to what I believe is where the opportunities will come as we keep opening up. Feel free to comment on what your thoughts are, whether you agree or disagree, on this topic 🙂
Please keep in mind, these are my thoughts based on research I’ve done. This is not to be taken as advice or recommendation.